Florida litigants must have a contractual or statutory basis for a claim for attorney's fees and are required, under the "Stockman Rule," to notify the other side of the intent to pursue fees. But what if the entitlement to attorney's fees did *not* exist at the outset of the dispute and only arose during the course of litigation? In this case, there was no basis for attorney's fees until the court sent the matter to non-binding arbitration, the losing party sought trial de novo, and lost. Then fees were available under Florida Statute, Chapter 44. Is there an exception to the Stockman Rule?

The decision of Jeffrey W. Cooper v. Marriott International Inc. and Central Parking System of Florida, Inc. toys with the idea of an exception but ultimately rules that the opposing side was properly on notice under the existing Stockman Rule. The dissent offers some conservative advice on seeking fees when the trial court orders parties to non-binding arbitration under Florida Statute 44.103.

In this case, the parties were ordered to non-binding arbitration by the court and, after an award, one side still sought trial de novo. Under the statute, if the recovery was not sufficient, the losing party who asked for trial de novo could be exposed to fees. They claimed the prevailing party waived that right by not asking for them.

We've discussed the general Stockman rule above, and here in this prior post. It is worth noting that a party need not set out the specific statutory or contractual basis for fees, as long as they clearly make the claim to put the other side on notice.

Here, the Panel (Gerber, Hazouri and Farmer) held that there was sufficient notice after trial since the party seeking fees filed a motion for entitlement, submitted a proposed judgment with fees, and proposed an order on entitlement. For what it is worth, this is the first opinion involving arbitration penned by new appellate court judge Gerber. In Judge Farmer's dissent, he voiced concerns that this was not notice which satisfied the Stockman concerns and, instead, recommended that parties file notices of intent to seek fees as soon as the trial court order non-binding arbitration.

Florida decisions regarding waiver of the right to arbitrate continue to confound as the state courts are not internally consistent and use a different standard than their federal court bethren. Thus, the same situation results in different outcomes depending on which courthouse you are in, as well as which city you are in.

The case of DFC Homes of Florida v. Wayne Lawrence is not likely to change the landscape of these waiver of arbitration disputes, but it does show the unusual situation which parties create when they do not consistently pursue their rights in one (and only one) forum. The clear takeaway message, however, is that attempts to settle a case are not inconsistent with seeking to compel arbitration. At least so says a Panel of the Fourth District (Polen, Gross, and Farmer).

In this case, the parties developed a dispute over a construction contract and both sides pursued arbitration. After one side was deemed the prevailing party, the other side filed suit in state court alleging that the arbitrators did not rule on all of the issues. The prevailing party then argued that the losing party waived any right to further arbitration.

The procedural history of this matter is a mess and the Panel correctly determined that there was no indication of waiver, even when the litigating party filed a motion to dismiss and pursued discovery limited to whether the arbitrators ruled on all issues.

The court held that offers of settlement were not tantamount to waiving arbitration and that to hold otherwise would conflict with the public policy desiring disputes be resolved quickly.

Notably, the Panel relied upon the fact that the alleged acts of waiver occurred *after* the party sought arbitration, not prior to seeking arbitration, and that they never put anything at issue by filing an Answer or seeking relief. For some time, we have been advocating that the bright line waiver standard should be whether a party makes or denies a claim in a counter/cross claim or Answer however other courts have not pursued that simple, bright line test. We question whether this decision signals that the Fourth DCA may take up that standard, at least in limited situations.

A frequent battle among litigants is whether there is a contractual or statutory basis for attorney's fees -- and then whether the prevailing party actually plead a claim for fees.

In Save On Cleaners of Pembroke II Inc v. Verde Pines City Center Plaza, LLC, the parties battled over an alleged breach of a commercial lease which included an attorney fee provision for the prevailing party. In this case, the defendant prevailed but the plaintiff claimed they had not properly plead entitlement to fees. The Panel (Farmer, Ciklin and Leban) disagreed.

The defendant had filed a motion to dismiss and claimed fees -- while that motion had been "abandoned," it apparently was not withdrawn, nor was there a withdrawal of the claim for fees. Likewise, the defendant pointed to instances where it sought fees, thereby putting the plaintiff on notice, in their opposition to default, settlement offer, trial brief, and proposed final judgment.

The court held that this was a legal issue (not reviewed by an "abuse of discretion standard") and that, under the 1991 Florida Supreme Court case of Stockman v Downs, "where a party has notice that an opponent claims entitlement to attorney's fees, and by its conduct recognizes or acquiesces to that claim or otherwise fails to object to the failure to plead entitlement, that party waives any objection or failure to plead a claim for attorney's fees." The Panel determined that the "Stockman Rule" plainly was geared towards requiring putting the opposing party on formal notice; that opposing party should likewise object if an adversary claims fees without prior notice.

The reasoning is based, in part, on Florida Rule of Civil Procedure 1.190(b) which involves trying issues by express or implied consent.

Given the number of arbitration enforcement decisions in Florida over the last several years, we are suspicious of a decision these days which takes several pages but provides only one case as precedent. You be the judge.

The Fourth District (Shahood, Warner and Hazouri) considered the arbitration clause in a residential construction contract in Toll Jupiter Limited Partnership, Toll FL GP Corp., and Michael Sheriff v. Michael A. Motto, Jr. At the trial level, the court had denied the motion to compel arbitration.

Admittedly, the facts are confusing. The agreement had an arbitration clause with a space for the buyer to initial. Instead of doing so, the buyer wrote, "See Addendum." On that addendum, among other terms and revisions, the buyer struck the arbitration clause. The buyer signed the addendum, the seller did not. In fact, upon signing the agreement, the seller sent a copy to the buyer but did not include the addendum. About two weeks later, the buyer wrote to seller acknowledging that the Seller had not agreed to the Addendum.

Thus, the buyer signed Contract + Addendum, which struck the arbitration clause, while the seller signed the Contract, and not the Addendum, despite (apparently) knowing that the buyer had intended the Addendum to be part of the contract. Basically, the seller essentially pretended to ignore the Addendum. Then, to confuse matters, both sides proceeded to perform.

Citing the three part rule on assessing the enforcement of arbitration in Seifert, the Panel held there was no meeting of the minds. No other case was cited. Right decision or wrong decision?

If you are fortunate enough to win a Motion for Sanctions under Florida Statutes 57.105, the one paragraph opinion in Diane Brown v. Pan Handle Citizens Coalition et al. (Per Curiam) may be valuable guidance for proposing an order.

The court held that an order granting 57.105 shall specify the number of attorney hours reasonably expended on the challenged claim. Moreover, there needs to be competent, substantial evidence in the record to support the fee award.

The Fourth District ruled that a Motion for Sanctions under Florida Statute 57.105 must be served on the opposing side 21 days before filing, pursuant to the "safe harbor" provision, and the fact that the motion was not heard until months after will not satisfy the strictly construed statutory requirement.

The dispute in Mary M. Montgomery and Bill T. Smith, Jr. as Personal Representatives of Robert M. Montgomery, Jr., Beasley Hauser et al. v. Christopher Larmoyeux, Jr., Eric Hewko et al. arises from an ongoing dispute between two West Palm Beach lawyers dating back nearly a decade. The parties had battled it out in arbitration, various trial courts, and all levels of Florida appellate courts.

The conclusion by the Panel (Hazouri, Farmer, and Taylor) may seem rudimentary but there is some practical guidance in the opinion for Florida lawyers.

In this case, the plaintiff brought claims of conspiracy and fraud (among other claims) but never sought to unearth any evidence of those torts and ultimately dismissed the case. The defendants separately served and filed 57.105 motions however one defendant filed the motion only a few days after serving it. Under Florida Statute 57.105(4), the motion "must be served but may not be filed with or presented to the court unless, within 21 days after service of the motion, the challenged claim... is not withdrawn or appropriately corrected."

On appeal, that defendant admitted the technical timing violation but argued that the motion was not heard for weeks and the plaintiff still had time to withdraw or correct the claims and thus still essentially had the benefit of the safe harbor provision.

The Fourth DCA held -- not surprisingly -- that 57.105 must be strictly construed and a prematurely filed motion was invalid. Notably, the court relied on the recent Third DCA case, Anchor Towing v. Dept. of Transportion, which held that serving a warning letter, without a copy of the motion, did not satisfy that same statutory provision.

Finally, the Fourth brings up an interesting practical point on 57.105 motions. If a plaintiff brings a complaint, the defendant attacks a count with a 57.105 motion, and the plaintiff later amends the complaint but still keeps the subject count, the defendant does not need to re-serve a new 57.105 motion.

The Second DCA issued a nursing home arbitration decision inwhich it delivered the 36th Florida nursing home/arbitration decision and the eighth Florida opinion interpreting one company's form contract. Or so the opinion claims. Needless to say, it's been one we've been anxious to address.

The interpretation of "non-severable" in the case may surprise some. The practical result, after all of this, is that one party might still void the agreement anyhow. Will this be the appellate decision which triggers legislative action?

We've previously offered the chronology of Florida appellate courts interpreting the Manor Care / HCR arbitration agreement. Along these lines, we've discussed how the Second District leaves non-gateway issues to the arbitrator and "eschews" the Fourth District's sliding scale approach to unconscionability (the Fourth DCA, along the with Third, appear to eschew the Second DCA's "gateway" approach).

The case is ManorCare Health Services, Inc.; Manor Care of America, Inc.; Manor Care, Inc.; Russell Ward; Douglas Webb; and Michelle Wicks v. Catherine Stiehl as Personal Representative of the Estate of Florence C. Halloran (Per Curiam).

Unlike most nursing home arbitration disputes, there is no question about the appropriate signing party nor a dispute over unconscionability. Instead, the question is whether the remedial limitations warrant denial of the Defendants' Motion to Compel Arbitration. Despite the presence of a clause entitled, "Nonseverability," the court concluded that any provision which offended the arbitrator could be severed.

As is precedent in the Second District, the court would "not address the enforceability of the remedial limitations" because that was "beyond the initial gateway determination of an arbitration agreement's enforceability..." Instead, that issue is left to the arbitrator. Other districts, meanwhile, have done the exact opposite. For a lengthy discussion see here.

Historically, for example, the Fourth District has declined to enforce arbitration agreements with offending remedial measures in Lacey v. Healthcare and Blankfeld v. Richmond. In other instances, if there is a severability clause, arbitration would be granted after severing the unenforceable provisions. More recently, in the absence of a severability clause, the court has still severed.

In Stiehl, the court was faced with a nonseverability clause. Specifically, AFTER a court or arbitrator decides enforceability of any challenged provision, the parties may choose to "cancel the agreement." Hence, invalidating a provision does not void the arbitration agreement; it leaves the decision to the parties (thus it is voidable). In this instance, presumably the plaintiff would both seek to attack the remedial limitations and, if they won on any point, they would then cancel the arbitration agreement, leaving everyone back at square one in terms of filing a lawsuit at the courthouse.

We note, in passing, the court's reference to the agreement's choice-of-arbitrators provision and the inclusion of the AAA as an optional arbitrator -- meanwhile, the AAA has since reportedly declined to accept these kinds of cases. That kind of provision, as well, is something the Second District has overcome recently.

Interestingly, the Second District found that the remedial limitations were not so intertwined in the essence of the agreement that it could not be severed; the Fourth District, previously, has found otherwise (see Lacey and Blankfeld, above).

Thus, the appellate court directed the case to arbitration. Not surprisingly, a week later, the plaintiff sought Florida Supreme Court review.

In sum, Stiehl involves an arbitration agreement (with a nonseverability clause) where the agreement is intended to quickly resolve disputes without resorting to litigation delays. But the court found the nonseverability clause still allows... severing provisions. And the Second District admits it "eschews" how other districts handle some of these issues AND further admits its precedent is different. So how a contract is treated in Tampa is different than how it will be treated in West Palm Beach. One judge on the Second DCA even questioned whether the whole court's precedent may be off kilter. Meanwhile, at the end of hearings and appeals, the plaintiff still holds the trump card to cancel arbitration if the arbitrator finds any portion of the agreement invalid. Frustrations exist on both sides.

There has been proposed legislation at the state and federal level to alter arbitration statutes and codes to disallow or significantly revise arbitration clauses between consumers/nursing home residents and corporations. None have gotten far.

But the cry for legislative action has gotten louder (read the dissent). The accusation is that remedial limitations are one sided and are inserted simply to avoid the governing statutes. Whether or not that is true, many people may find Stiehl a frustrating case to understand and an indicator that the courts may have gotten these issues wrong. Will it be a catalyst during the next legislative term? We'll keep an eye on that... and the appeal to the Florida Supreme Court.